Human Resources News & Insights

Heads up: The IRS could be poking around your COBRA procedures

Got all your COBRA procedures in line? Because it looks like the IRS could be stepping up its audit program.

The IRS recently released revised audit guidelines for its COBRA investigators. The new rules cover reg changes in such laws as HIPAA and FMLA.

Russell Chapman, Lisa Taggart and Andrea Jackson, writing on, outline some of what the new rules cover:

  • Some insight into the IRS’s approach to COBRA enforcement.
    By way of example, the guidelines provide that when an employer contends that an employee was ineligible for COBRA rights because he was terminated for “gross misconduct,” an auditor may consider whether the employee was granted unemployment compensation benefits, whether the employee grieved his termination under a collective bargaining agreement and the results of any related proceedings, and in some circumstances witness accounts regarding the alleged gross misconduct. 

    If the employee was awarded unemployment compensation benefits and/or won an arbitration regarding his termination, the guidelines note that the employer may have failed to comply with COBRA.
  • A list of documents to be requested by an auditor during a COBRA audit.
  • A list of interview questions for an auditor to ask of the responsible parties in order to examine and address specific areas for noncompliance.

The new guidelines “appear to herald a new COBRA compliance audit effort by the IRS,” the three authors write.



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